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Insurance for millions for less than $100 per month

According to a new report released today by the Department of Health and Human Services and obtained by USA TODAY, there will be an estimated 6.4 million Americans eligible to buy insurance through the new health exchanges and will pay $100 or less a month in premiums because of tax subsidies.

HHS Secretary Kathleen Sebelius claims that the new insurance available under Obamacare will make health insurance more affordable, with an estimated half of all uninsured Americans able to get coverage at $100 or less. She claims that the law will successfully allow most Americans to get the affordable and quality care they have needed.

What is Obamacare insurance?

In 2010, Congress passed the Affordable Care Act, which forces all U.S. citizens who do not have employer provided health care, Medicaid or Medicare to join “exchanges,” which have been created by the states, to purchase government mandated health insurance. The law also provided states with additional federal subsidies to offer Medicaid insurance to more low-income Americans.

According to the study, the affordable coverage estimates are based on families purchasing what the states call silver plans. If a family is making less than 400% of the poverty level, or $94,200 for a family of four, they will also be able to get governmental subsidies to pay for their insurance.

Unfortunately, the claims seem a bit premature. There are many states that have yet to announce their rates for their insurance plans so the researchers for the study had to make cost estimates with limited data. Researchers, however, decided they could make estimates with the available data.

The example provided by USA Today states that if the “Affordable Care Act states that someone making 150% of the federal poverty level, or $17,235 a year, would pay 4% of their income — or $57 — for the second-lowest-cost plan. So, that person's subsidy would be the difference between the $57 and the cost of the silver plan in that state.”

What about Medicaid insurance expansion?

Surprisingly the Supreme Court upheld most of the provisions of the Patient Protection and Affordable Care Act. They did, however, strike down the mandatory expansion of Medicaid by the states and ruled instead that the Federal Government could not withdraw existing Medicaid funding if the states decides they did not want to expand Medicaid in their states. As a result, many states have decided not to expand their programs.

Why would states opt out? Many states simply cannot afford the expansion. Although the government offered to pay for the expansion through 2014, some states have looked further ahead and understand that by 2020, they will be required to pick up some of the tab. States with a high number of uninsured understand that eventually this could lead to severe financial difficulties within their states.

Although proponents of the healthcare law say that in the long-term the Medicaid expansion will save both state and federal governments money while extending healthcare coverage to millions of lower-income Americans, others contend that states should have right to decide if they can afford this expansion.

So what will happen now? Opportunities for Medicaid will be limited in many states. For example, there are only 25 states which have decided to expand Medicaid. The other states are still deciding or have refused to expand the program.

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